United States v. Shondrell Campbell ( 2014 )

Case: 12-31172 Document: 00512501835 Page: 1 Date Filed: 01/15/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
January 15, 2014
No. 12-31172 Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff–Appellee
v.
SHONDRELL CAMPBELL,
Defendant–Appellant
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:11-CR-77-1
Before SMITH, PRADO, and ELROD, Circuit Judges.
PER CURIAM:*
Shondrell Campbell (“Campbell”) pleaded guilty to a single count of aiding
and assisting in the preparation of and production of false and fraudulent tax
returns. She appeals the district court’s order of restitution. We reverse and
remand.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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I. FACTUAL AND PROCEDURAL BACKGROUND
Campbell owned Unlimited Tax Service, a tax preparation business. In
2002, Campbell applied for and obtained an Electronic Filers Identification
Number (“EFIN”) so that Unlimited Tax Service could electronically transmit
returns to the IRS. In 2003, the IRS Fraud Detection Center (“FDC”) discovered
a significant amount of unsubstantiated tax returns that Campbell had filed on
behalf of Unlimited Tax Service. During the FDC’s ensuing investigation, the
IRS discovered that Campbell had filed fraudulent individual tax returns on
behalf of her clients by including false credits, deductions, income, and expenses
on the returns. Unbeknownst to her clients, Campbell had the refunds deposited
in her own bank account, and then paid the clients a lesser amount.
Upon discovering the fraudulent tax returns, the IRS suspended
Campbell’s EFIN. Between April 2005 and April 2011, however, Campbell
directed others to apply for EFINs. As a result of these other EFINs, between
2004 and 2010, Campbell filed 1,588 allegedly fraudulent tax returns. The IRS
paid a total of $ 3,738,475 in refunds on these fraudulent tax returns.
Campbell was charged in a twenty-count second superseding indictment.
Count 1 charged Campbell with conspiracy to aid and assist in the preparation
of and production of false and fraudulent tax returns, in violation of 18 U.S.C.
§ 371 and 26 U.S.C. § 7206(2). Counts 2 through 18 charged Campbell with
aiding and assisting in the preparation of and production of false and fraudulent
tax returns, in violation of 26 U.S.C. § 7206(2). Count 19 charged Campbell with
endeavoring to interfere with the administration of internal revenue laws, in
violation of 26 U.S.C. § 7212(a). Finally, Count 20 charged Campbell with
obstruction of justice, in violation of 18 U.S.C. § 2 and 18 U.S.C. § 1503.1
1
Following her first indictment, law enforcement officials caught Campbell advising
a witness to avoid service of a grand jury subpoena and to lie if brought before the grand jury.
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In February 2012, Campbell pleaded guilty to Count 12. In the factual
basis, Campbell admitted to filing a fraudulent tax return on or about April 15,
2009. In her plea agreement, Campbell agreed to pay restitution. Campbell also
agreed to an appeal waiver, by which Campbell agreed to waive her right to
appeal her conviction and sentence, except to the extent a “sentence imposed
[was] in excess of the statutory maximum.” The presentencing report (“PSR”)
calculated an advisory guideline range of 97 to 121 months of imprisonment.
However, because § 7206(2) imposed a maximum sentence of 36 months, the
guideline range was restricted accordingly.
Campbell filed a sentencing memorandum raising nineteen objections to
the PSR. At the sentencing hearing, two witnesses testified: the government
presented the testimony of Special Agent Jason Boyles of the IRS Criminal
Investigation Division as to the amount of the restitution, and Campbell called
her mother to testify as to her character. Agent Boyles testified that after
Campbell’s EFIN was suspended, she used EFIN numbers that were
fraudulently obtained in other people’s names. Agent Boyles also testified to the
number of returns Campbell filed annually and the total annual amount of
refunds these returns yielded. Since Campbell was not authorized to use EFINs
obtained by other individuals, the Government argued that the tax returns filed
under these EFINs were all fraudulent, and Campbell was thus responsible for
the entire amount of the refunds these returns generated.
After hearing all the testimony, the district court concluded that the
findings in the PSR regarding the guideline calculations, the amount of loss, and
restitution were correct. The district court sentenced Campbell to eighteen
months of imprisonment and ordered her to pay $3,738,475 in restitution.2
2
In light of Campbell’s financial condition, the district court ordered the restitution be
paid at a rate of seventy-five dollars per month.
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Within fourteen days after sentencing, Campbell filed a pro se motion
under Federal Rule of Criminal Procedure 35(a) (“Rule 35(a)”) to reconsider
sentencing. In her motion, Campbell contested the restitution amount, arguing
that she could only be held accountable for tax losses caused by the offense of
conviction. She further asserted that she would never have entered into the plea
agreement, which did not specify a specific restitution amount, had she known
that “relevant” conduct would be considered in calculating the amount of the
restitution she owed to the IRS.
The district court noted that Campbell was represented by counsel at the
time the court received her pro se motion. Nevertheless, to the extent that
Campbell’s motion could be construed as a motion to reconsider, the district
court denied the motion on the merits.
II. JURISDICTION
The district court had jurisdiction under 18 U.S.C. § 3231. Campbell
timely filed a notice of appeal from the district court’s judgment of sentence.
This Court has appellate jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C.
§ 3742.
III. DISCUSSION
On appeal, Campbell argues that the district court erred in ordering her
to pay restitution in excess of the loss caused by the offense of conviction. In
response, the Government first contends that Campbell’s appeal waiver should
bar the instant appeal. Next, the Government insists that Campbell failed to
preserve her argument on appeal. Because we hold that Campbell’s appeal falls
within the plea agreement’s exception and that Campbell adequately preserved
her argument on appeal, we reach the merits of Campbell’s argument and hold
that the district court abused its discretion by ordering restitution above the
amount authorized by statute.
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A. Appeal Waiver Exception
The Government seeks to enforce the appeal waiver provision in
Campbell’s plea agreement. This Court reviews de novo whether an appeal
waiver bars an appeal. United States v. Baymon, 312 F.3d 725, 727 (5th Cir.
2002). To determine the validity of an appeal waiver, this Court conducts a
two-step inquiry. United States v. Bond, 414 F.3d 542, 544 (5th Cir. 2005).
Specifically, this Court considers whether the waiver was made knowingly and
voluntarily and whether, under the plain language of the plea agreement, the
waiver applies to the circumstances at issue. Id. In determining whether a
waiver applies, this Court employs ordinary principles of contract interpretation,
construing waivers narrowly and against the Government. United States v.
Palmer, 456 F.3d 484, 488 (5th Cir. 2006).
In the instant case, the written appeal waiver stated that Campbell
waived the right to appeal her conviction and sentence on direct appeal, except
in the case of a sentence in excess of the statutory maximum. Campbell also
signed the agreement, acknowledging her agreement. At rearraignment, the
district court asked Campbell whether she understood the terms of the plea
agreement and its appeal waiver provision. Campbell stated that she
understood. Campbell further stated that no one had forced or compelled her to
plead guilty. Thus, the appeal waiver was entered knowingly and voluntarily
and satisfies the first step of the two-part inquiry. See United States v.
McKinney, 406 F.3d 744, 746 (5th Cir. 2005).
Campbell nevertheless contends that the appeal waiver contained in her
plea agreement does not bar her present appeal. The appeal waiver states that
Campbell waived the right to appeal her conviction and sentence on direct
appeal, except in the case of a sentence “in excess of the statutory maximum.”
Campbell contends that the appeal waiver does not bar her claim that the
restitution amount exceeded the statutory maximum under 18 U.S.C.
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§ 3663(a)(2). Campbell relies on United States v. Chemical & Metal Industries,
Inc., (C&MI), 677 F.3d 750 (5th Cir. 2012). In C&MI, this Court found the
appeal waiver—which contained a similar “in excess of the statutory maximum”
exception—did not bar the defendant’s challenge to the restitution award. Id.
at 752. The Court reasoned that (1) 18 U.S.C. § 3664 does not authorize a
district court to enter a restitution order that exceeds the victim’s losses; and (2)
an appeal of such an order would be an appeal of a sentence exceeding the
statutory maximum. See id. at 752. C&MI controls Campbell’s case. Just like
in C&MI, Campbell’s appeal falls within the exception to the waiver appeal that
the parties agreed to in the plea agreement.
B. Adequate Preservation of Argument
Campbell contends that she preserved her arguments both in her
objections to the PSR and in her timely pro se motion filed pursuant to Rule
35(a). In reviewing her objections to the PSR, it is clear that Campbell did not
raise the claims she now raises on appeal until she filed her pro se Rule 35(a)
motion. Although the district court was not required to consider her pro se
motion given that she was represented by counsel, the court denied the motion
on the merits. The Government cites no case, and we have found none, that
suggests that a district court would be prohibited from exercising its discretion
to consider a pro se motion from a defendant who is also represented by counsel.
Thus, even if Campbell was not entitled to file a pro se Rule 35(a) motion, the
district court had the discretion to consider it on the merits. See United States
v. Colomb, 419 F.3d 292, 299 (5th Cir. 2005) (noting that district court has
inherent power to control its own docket). We note, too, that Campbell was no
longer represented by counsel when the district court entered its order.
Having determined that Campbell’s Rule 35(a) motion adequately raised
the issue to the district court, we must determine whether, in general, a Rule
35(a) motion allows a district court to correct the alleged error at issue here.
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“Within 14 days after sentencing, the court may correct a sentence that resulted
from arithmetical, technical, or other clear error.” Rule 35(a). The Advisory
Committee Notes to Rule 35(a) explain that Rule 35(a) was intended to codify
the results in United States v. Cook, 890 F.2d 672 (4th Cir. 1989), and United
States v. Rico, 902 F.2d 1065 (2d Cir. 1990). Id. advisory committee’s notes
(1991 Amendment). In Cook, the appellate court upheld the district court’s
decision to amend a sentence that was not authorized under the sentencing
guidelines as they existed at the time, and thus, “was not a lawful one.” 890
F.2d at 674–75. In Rico, the appellate court upheld the district court’s decision
to correct a sentence that mistakenly applied a plea agreement and constituted
an “illegal sentence.” 902 F.2d at 1068. Thus, these cases indicate that a 35(a)
motion is intended to correct a sentence that was unlawful. See Rico, 902 F.2d
at 1068; Cook, 890 F.2d at 674–75; see also United States v. Watkins, 450 F.3d
184, 185 (5th Cir. 2006) (determining that a Rule 35(a) motion preserved a Sixth
Amendment argument).
We determine, as discussed below, that Campbell’s sentence is not lawful
under United States v. Hughey, 495 U.S. 411 (1990), because the restitution
order exceeds the scope of the offense of conviction. Therefore, Campbell
preserved her appellate claims via her Rule 35(a) motion. Thus, we review the
district court’s restitution award under an abuse of discretion standard. United
States v. Adams, 363 F.3d 363, 365 (5th Cir. 2004).
C. The Restitution Award
Restitution is generally available for losses stemming from the conduct of
the offense of conviction. Hughey, 495 U.S. at 420 (“[T]he loss caused by the
conduct underlying the offense of conviction establishes the outer limits of a
restitution order.”); see also United States v. St. Junius, 2013 U.S. App. LEXIS
25155, at *52–53 (5th Cir. Dec. 18, 2013) (substitute opinion on petition for
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rehearing) (holding, on plain-error review, that restitution is limited to losses
stemming directly from the offense of conviction).
Beyond that, the restitution statute, 18 U.S.C. § 3663, does not authorize
restitution orders compelling payment to the IRS for a Title 26 offense. See
United States v. Stout, 32 F.3d 901, 905 (5th Cir. 1994) (holding that § 3663 only
permits separate restitution orders for offenses under Title 18 or 49 and vacating
restitution award ordered for offense under Title 26). Section 3663 does,
however, allow the sentencing court to “order restitution in any criminal case to
the extent agreed to by the parties in a plea agreement.” § 3663(a)(3); see also
Stout, 32 F.3d at 905 n.5.
A sentencing court may also require restitution to the IRS for a Title 26
offense as a condition of supervised release. 18 U.S.C. § 3583(d)(3) (authorizing
a sentencing court to impose “any condition set forth as a discretionary condition
of probation in section 3563(b) and any other condition it considers to be
appropriate”); Miller, 406 F.3d at 329 (“[A]lthough . . . 18 U.S.C. § 3663 [ ] does
not expressly cover tax offenses such as that under which Miller was convicted,
§ 3583(d) authorizes such restitution as a condition of Miller’s supervised
release.”). Section 3583(d) allows the sentencing court to impose a condition of
supervised release requiring restitution to the IRS without the defendant’s
agreement, but only if the restitution is “limited to losses from the crime of
conviction.” United States v. Nolen, 523 F.3d 331, 332–33 (5th Cir. 2008); see
also Stout, 32 F.3d at 904 (vacating restitution order and remanding for
resentencing where defendant never expressly agreed to pay restitution and
noting that “[s]entencing courts are permitted to impose restitution as a
condition of supervised release to the extent agreed to by the government and
the defendant in a plea agreement.” (citations omitted))
Campbell acknowledges that the plea agreement allowed the consideration
of relevant conduct for the purposes of calculating her guideline range, but not
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for determining the amount of restitution. Campbell contends that the “general
statement in the plea agreement that § 3663 would apply did nothing to extend
her liability beyond Hughey,” i.e., that restitution would be limited to the loss
associated only with the offense of conviction. Because the count of conviction
to which she pleaded guilty states a loss of only $7,500, Campbell contends that
her restitution should be limited to that amount.
The Government asserts that the plea agreement’s reference to § 3663
gave the district court authority to order restitution in accordance with the
terms of the plea agreement. According to the Government, the plea agreement
provided that relevant conduct set forth in the second superseding indictment
and “any other applicable conduct” would be used in the calculation of
Campbell’s sentence, including the amount of restitution she owed. The
Government further argues that Campbell acknowledged that relevant conduct
would be considered in the calculation of her restitution in her factual basis, at
rearraignment, and at sentencing. Alternatively, the Government contends that
the restitution order was proper as a condition of Campbell’s supervised release.
We hold that Campbell did not agree to the imposition of restitution
beyond the amount stemming from the offense of conviction. Contrary to the
Government’s assertion, Campbell did not acknowledge at rearraignment that
relevant conduct would be included in the calculation of restitution. The
transcript merely reflects that Campbell acknowledged that she “may
additionally be required to reimburse any victim for the amount of loss under the
victim’s restitution law if that law is at all applicable to these proceedings.” The
factual basis, like the plea agreement, generally mentions relevant conduct when
calculating Campbell’s guideline calculation. However, there is no mention of
relevant conduct in connection with restitution, thus distinguishing Campbell’s
case from those where this Court has held the district court properly considered
relevant conduct beyond the offense of conviction in the restitution order. See
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United States v. Simmons, 420 F. App’x 414, 421 (5th Cir. 2011) (unpublished)
(per curiam) (rejecting defendant’s argument that restitution should be limited
to offense of conviction because plea agreement provided that defendant would
pay restitution and “‘that restitution [was] not limited to the amounts charged
in the Indictment’”); Miller, 406 F.3d at 329–30 (upholding restitution order that
was not limited to the offense of conviction because defendant agreed in plea
agreement that restitution would include “all relevant conduct, not limited to
that arising from the offenses of conviction alone” (internal quotation marks
omitted)). At oral argument, the Government conceded that Campbell’s plea
agreement did not expressly provide for the consideration of relevant conduct in
calculating restitution. Ultimately, the restitution order was unlawful: 18
U.S.C. § 3663 does not authorize restitution orders compelling payment to the
IRS for a Title 26 offense, and 18 U.S.C. § 3663(a)(3) only permits restitution to
the extent agreed to in the plea agreement. Thus, the district court here was
authorized to order “an award of restitution only for the loss caused by the
specific conduct that is the basis of the offense of conviction.” Hughey, 495 U.S.
at 413.
IV. CONCLUSION
For the foregoing reasons, the judgment of the district court is REVERSED
and REMANDED for resentencing consistent with the above.
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